I think your conclusion that unemployment must be a glut of labor is both wrong and politically destructive. By turning this into a labor-market problem, you are implicitly accepting Say’s law and rejecting the principle of aggregate demand. And you are wrong factually. All factors of production are in excess supply in a recession, not just labor.

What you are saying here is that changes in (realized or desired) balance sheet positions never affect the real economy. I’m sure you don’t think that’s what you’re saying, but it is.

Josh may be right. But I really don’t think that’s what I was saying, and my gentle readers will know that it’s very much not what I want to be saying. I think he’s framing my argument in terms that implicitly concede the exact false assumption I was dismantling in my post — that more saving causes lower rates so more borrowing so more investment.

This gets messy so I’ll just say: We have the amusing situation where Josh and I — who as far as I can tell agree on almost everything — are mutually accusing each other of sleeping with the enemy.

In any case, what Josh thinks I’m saying is certainly not what Ryan Avent is saying, when he says exactly the same thing I was saying:

…full employment is no longer compatible with full utilisation of capital. The “great savings glut” story may indeed be a tale of insufficient investment opportunity. The return on capital is low because the return on labour is low: because society is allowing the market to become glutted with labour, none of the potential high-return capital investments are economical. The global savings glut might well be thought of as a global labour glut.

This is an abundance versus scarcity argument, not a production-causes-income argument. The dominant resource — effective, efficient, productive human labor — is not scarce. As productivity steadily increases, it’s ever more abundant.

And the takeaway? I’ll leave that to Ryan:

Fiscal expansion could help, but the gain from fiscal policy is likely to be limited unless it is structured to try and reduce labour supply. That’s right, reduce labour supply.

In other words, the very anathema of the right: paying people not to work.

The ultimate goal of increased productivity is straightforward: more stuff, less work. The problem is that those who own the stuff don’t want the people who don’t own the stuff to slack off or get a larger share of the stuff. They only like that mantra when it applies to them.

And they don’t understand the inexorably destructive arithmetic of their selfish rivalry in a high-productivity economy — that their refusal to share the wealth, their frantic hoarding, results in us all having less wealth. It’s a classic coordination failure, a tragedy of the common good.

RA’s column is interesting. But I don’t think he means the same thing by “labor glut” that you do. You are telling a story where fixed output + rising labor productivity –> lower employment. He is telling a story where employment –> wages –> demand –> output. In your story, lower wages raise employment. In his story, lower wages reduce employment.

Again, in your post, you say that the notion of a global savings glut is incoherent, impossible. RA says that it is better thought of as an investment opportunity shortage. These are two different claims.

I want to admit first that in my denseness, despite thinking very hard and long, I just can’t seem to grok how Global Labor Glut (or rejecting global savings glut) implies Say’s Law. Ryan does the latter but not, as explicitly, the former. Any help for my feeble mind much appreciated.

Except: if the assertion is viewed in a conceptual framework whose assumptions make that conclusion inevitable. A conceptual framework that I find to be incoherent. Snake biting its own conceptual tail, here… Again, help!

I think “fixed output” may be the key to our disconnect here. Measured how? (Cue: Cambridge Capital Controversy.) I don’t think “fixed output” is inherent in what I’ve written. (But…?)

What I’m trying to say (starting at a somewhat arbitrary point on the snake): as prosperity increases, the marginal unit of output (counted in “leets”) is steadily less valuable. Asymptotically.

This is a cardinal-, absolute-utility argument (even though we can’t measure absolute utility). Stepping around and outside decades of ordinal/relative-utility price theory. (Which I — again perhaps in my confusion — consider to be a massive evasion based on a logical error: “because absolute utility is not measurable, it doesn’t exist.”)

Since the marginal unit is less “valuable,” people will pay less dollars for.* (I’m not the first to point out that increasing productivity is inherently deflationary.)

This is the crux. How does rejecting the global savings glut story tell that story? I just can’t grasp how my story differs materially from Ryan’s.

Or maybe: how can my story be spun to tell the pernicious Say’s Law story, while Ryan’s is more impervious?

* So the people making those marginal units get less dollars. So they buy less of those marginal units. So they’re even less valuable. The solution being to get more of the money into more people’s hands, to counter that spiral.

This not the hot-money-potato-downward-spiral story. It’s the low-wages-causes-deflation-hence-unemployment-and-lower-wages story. Add downward stickiness and it’s pretty straightforward new Keynesian. If people save more/spend less, it doesn’t increase savings/investment, it only accelerates that spiral, for lower aggregate income and net worth. Saving doesn’t increase savings (or employment). QTC. Spending increases savings and employment.

When two lines of thought from very different origins converge, I’ve learned to take notice.
I don’t pretend to follow your reasoning well, but I think you’re using microeconomic arguments (which I don’t need).
I take the liberty of reframing one of your points to conform it to my conclusion –
I suggest an “investment opportunity shortage” is one view; alternatively, there is an excess of available capital over what would make for a reasonable proportionate return.
This leads to my tentative conclusion that there is abundance both of capital and productive labour; that we are (in aggregate) rich. If so, the game has changed as it is no longer zero-sum. Strategy and theory that assumes it still is may be obsolete and even dangerous. The general Establishment response seems to be “lets make (almost) everyone poor, so we can start over”. I welcome any discussion of alternatives.
Are we in accord?

@Peter Shaw “If so, the game has changed as it is no longer zero-sum.”

I’d rephrase that: it’s not longer about scarcity. So rivalry — which in the context of scarcity theoretically allocates scarce resources efficiently — only serves to create artifical pockets of scarcity. Pockets with insufficient resources to efficiently produce more resources.

The use of words in describing economic situations is fraught with conundrums (and conundra).

Consider the word ‘glut’ – but first just in the context of saving.

Some would say there is a ‘glut’ of saving in the sense that there is too much desire for saving – which is demand restraining. That is really a mismatched excess of planned or desired or target saving in some sense over actual saving.

Others might look at the same situation (think MMT) and say there is in fact a dearth of saving – because more saving is actually required in order to liberate demand forces once saving desires (net or whatever) are satisfied (think of the MMT saver as being unsated in the sense of not yet being supplied sufficient net financial assets mostly in the form of government deficits to satisfy his saving desire.) That expresses a shortfall of actual saving to desired saving.

So the glut of saving is a glut in the general category of saving versus saving.

And that glut is also a scarcity in the same general category.

I don’t know if or how that enigma translates to the labor version of glut.

>So the glut of saving is a glut in the general category of saving versus saving.

Yes. And that sentence pretty much epitomizes why I think “saving” in its various and sundry senses is such a lousy conceptual construct for thinking about any of this. I’m going to suggest that .0001% of people and less than 1% of economists could grok that statement properly, much less its implications.

Just thinking about individual saving and savings: Lifetime saving (income minus expenditures) has only a partial relationship to life savings, because the latter (for anyone with assets) is so heavily dependent on cap gains. Which of course aren’t “income,” so don’t impact saving/savings.

Much better IMO to think of a stock of financial assets (embodiments of money, hence the money stock) that increases and decreases with fundamentals and the market’s perception of those fundamentals. Some of that money gets spent, turned over, each year for purchases of real goods and services, causing production, surplus, and accumulation (“saving”?). It’s about the stock and the velocity. (I know, I’m going all monetarist here, but I’m using a coherent definition of money.) “Saving,” with its manifold senses and confusions (more-than-amply demonstrated, I think, by the zillions of words you, I, and Very Smart Others have felt the need to spill wrestling with it) consistently obscures that alternative, rather straightforward conceptual understanding.

So if the stock is lower (pessimism drives down financial-asset values [I think of deeds as financial assets — claims on real assets though without an offsetting liability on another’s books]), or the velocity is lower (pessimism drives down spending as a percent of the stock) there’s less accumulation. Less spending results in — causes — there to be less “savings.”

I fully realize why capital gains are not counted as “income,” so do not contribute to “saving.” Makes accounting sense. But it results in egregious and confused economic thinking.

“Much better IMO to think of a stock of financial assets (embodiments of money, hence the money stock) that increases and decreases with fundamentals and the market’s perception of those fundamentals.”

I agree with that – but would strengthen it with a qualification of closure.

It’s good to anchor your thinking on the subject by observing what happens to the change in the stock of assets – but that’s not inconsistent with being quite aware of the composition of what contributes to that change.

That includes a distinction between the marginal effect of newly generated GDP saving and the marginal effect of a revaluation of prior period generated GDP saving as two separate components in what happens to the change in the stock over time.

The journey of the same balance sheet between two points in time includes both a current period GDP saving effect and a prior period accumulated stock revaluation effect.

The anchor for the understanding is balance sheets IMO – which is quite consistent with how you’d like to look at it I think.

Rather than view income and saving accounting as an impediment, I would suggest viewing it as something to be absorbed – conquered if you will – into the understanding of how balance sheets change over time – as one component at the margin – which again is not inconsistent with what you want to emphasize.

“I fully realize why capital gains are not counted as “income,” so do not contribute to “saving.” Makes accounting sense. But it results in egregious and confused economic thinking.”

I am not really sure why you keep mentioning that saving ought to be defined differently and now this capital gains issue as well. IMO, the standard definitions are quite right. Those who have worked with them have taken special care to make things self-consistent.

Back to macroeconomics. Take simple example for illustration and avoid complication of loans. Say I earn $1m and pay taxes worth $200K and have consumption of $100K and buy a house for $700K in one year. My saving is $1m minus $200K minus $100K and the counterpart of the saving is the house purchase. If there are some capital gains on previously existing assets, that appears in the revaluation accounts and also has an effect on the closing balance sheet. Of course house is different from financial assets but that is a separate issue. So I don’t why someone might get confused on this. It is even simpler than “work” in Physics. That doesn’t prevent you from an alternative accounting system but it has to be coherent.

I fully agree with JKH – shouldn’t be an impediment and something that should be conquered and “Only if you let do so, in my view.”

I’m extraordinarily pleased to say that I understood every word of that comment. I may finally be grokking this stuff.

“a distinction between the marginal effect of newly generated GDP saving and the marginal effect of a revaluation of prior period generated GDP saving as two separate components”

Very well put.

Also — for those seeking to understand how individual and sectoral saving relate, and how they relate to savings — I would emphasize that much of household annual cap gains on equities very much are “income” and “saving” in the form of retained/undistributed earnings. They just happen to be tallied up on corporations’ income statements rather than their shareholders’. (Then they get revalued in ensuing years.)

People would consider this all very differently if all corporations were S-Corps. (Be still my heart.) (Similar/ditto for real-estate cap gains, though if they’re wholly owned, they don’t get tallied anywhere until sale.) And if corporations in the NIPAs and SNAs did consumption spending, and households did investment spending. As stylized therein, all business spending is investment, hence saving = (business) spending. No wonder people are so confused.

“Rather than view income and saving accounting as an impediment, I would suggest viewing it as something to be absorbed”

Excellent advice for me, interested dweeb that I am. I’ve been trying hard to follow that JKH advice for some years, and with some success.

But I don’t object to income and saving accounting; I object to the usage(s) of “saving.” I still maintain that the S = Y – C = I identity is a terrible way to explain saving and savings. Again, demonstrated by the fact that it took me years to untangle that from the simple explanations in your and my comments here (I’m really not stupid), and that the likes of JKH, Nick Rowe, John Carney, David Beckworth, et. al. have had to wrestle with it at such length.

And the whole “desired saving” etc. economic construct, IMO, is not a useful or accurate way to think about how economies work.

Even if you increased the general populace’s understanding of S = I by an order magnitude, you’d still only achieve .001% understanding. Economists might go up to 10%. As a result, it’s rhetorically and politically pernicious; it’s frequently used for evil purposes, in almost all cases without even the perpetrator understanding how fiendishly clever the false usage is.

Oh and BTW, I just looked at changes in annual household net worth in the Z.1, breaking it out into 1. net saving and 2. revaluation (“Holding gains on assets at market value”). Averaged over several years, revaluation overwhelms net saving by a factor of 4.8-to-1. Now that I think about it, I should probably run that ratio for gross saving, but it’s a sunny friday and I gotta run out the door and go drink with friends on a deck by the water! Have a good weekend…

I’ve written a bunch about this previously, but it comes down to the fact that macro closure of micro possibilities means that saving must be defined as a residual of income after consumption. That’s the only way that the entire system can be closed coherently from an accounting perspective while allowing for micro mismatches between saving and investment (which is an inherent possibility in the institutional structure of a modern economy that separates firms from households), including micro mismatches of negative saving (spending more than your income on consumption). There’s just no other way of doing it while maintaining an “adding up” integrity that holds over a complex institutional structure that features such micro mismatches of saving and investment. The thing MUST be skinned at the micro level as a residual concept of saving from income after consumption. (And yes that includes net of consumption of capital when speaking of net investment rather than gross investment.)

Yeah – but we gotta fight the good fight man. No short cuts to the truth. Changing language alone is like moving the deck chairs around on the Economic Titanic. (I have a profound distaste for a certain post-Keynesian sub-group because of this this type of thing.) Actually, all the answers are found in understanding the components of balance sheets and how they get there. Savings or net worth is just sitting there, including the part that came in over the latest accounting period as saving from income over that period.

Yeah – the revaluation effect can be massive due to housing and stock market cycles, but that can go in both directions over time.

You’re the sole shareholder of a corporation with undistributed earnings this year of $100K.

1. It’s a C corp. For tax purposes, at least, that’s the corporation’s income, and contributes to the corporation’s saving and savings.

2. It’s an S corp. For tax purposes, at least, that’s your income, and contributes to your saving and savings.

Those are both perfectly valid accounting representations. Which one imparts an accurate “understanding of how the world works”? Would it be “wrong” to use the imputation in #2 when constructing the household and firm tables in the national accounts?

Accounting is rife with imputations. Necessarily. They are not right or wrong; the are stylized representations — models, essentially. Different stylized representations are more or less useful in imparting different understandings of different aspects of how economies work, and in supporting different rhetorical and political positions.

The NIPA stylized representation, for instance — the structure of the tables and the naming of the line items — suggests a somewhat different understanding of how economies work than the IMAs. Even though each is accurately accounting for the flows and stocks of the economy, a different economic understanding naturally emerges from each.

Or in other words: certain stylized representations make it very difficult to conceptualize certain economic understandings, even seem to suggest that some other economic understandings are obvious or inevitable. Like they somehow exist in nature.

I’ve said it before: accounting constructs (table structures, labels, and definitions) chosen to describe the economy are inevitably stylized hence rhetorical, normative, and political. To suggest otherwise is to implicitly endorse the false and perverse notion that economics also is purely positivist — to remove the “political” from “political economics.”

See for instance “Comprehensive Income” as employed by the CBO, Edward Wolff, and others. It’s not “income” as that term is defined and employed in the NIPAs. But it’s just as “accounting-valid” as NIPA income. Flow and stock tables that are constructed around, and highlight, that defined measure may suggest very different rhetorical implications.

(BTW, when I said: “I hope you enjoyed that respite from the toils of understanding how the world works, although sometimes our best ideas come from such escapades”, I was inferring that “we” (as in “our” efforts) find it toiling, not just you. So I hope you didn’t read that the wrong way.)

You and I see this issue of accounting very differently. You see it as an impediment. I see it as a liberator.

All of this noise you point to is reconcilable. I’m not that familiar with the S corporation treatment, but I’m not daunted by it at all. Hell, there are far more difficult issues than that in some of the flow of funds balance sheets reported by the Fed in its quarterly statements. There’s lots of messiness and noise. That said, I think the idea of recognizing the distinction between retained earnings and dividends paid in the case of C corporations is fairly core to the general understanding of how one should locate and identify saving as that concept is affected by corporate America. The ultimate result in terms of stock savings includes many trillions in C corporation stock market value. And “comprehensive income” is a management accounting issue. That can be reconciled quite easily with flow of funds, as somebody has done here in Wiki:

++++++++++++++++++++++

Comprehensive income is the sum of net income and other items that must bypass the income statement because they have not been realized, including items like an unrealized holding gain or loss from available for sale securities and foreign currency translation gains or losses. These items are not part of net income, yet are important enough to be included in comprehensive income, giving the user a bigger, more comprehensive picture of the organization as a whole. Items included in comprehensive income, but not net income are reported under the accumulated other comprehensive income section of shareholder’s equity. Comprehensive income attempts to measure the sum total of all operating and financial events that have changed the value of an owner’s interest in a business. It is measured on a per-share basis to capture the effects of dilution and options. It cancels out the effects of equity transactions for which the owner would be indifferent; dividend payments, share buy-backs and share issues at market value. It is calculated by reconciling the book value per-share from the start of the period to the end of the period. This is conceptually the same as measuring a child’s growth by finding the difference between his height on each birthday. All other line items are calculated, and the equation solved for comprehensive earnings.

BTW, Godley and Lavoie recognize the existence of differences between macro flow of funds and income accounting versus corporate level reporting. And they certainly weren’t daunted by it.

But I can’t figure out why any of this stuff should cause what you describe this way:

“I’ve said it before: accounting constructs (table structures, labels, and definitions) chosen to describe the economy are inevitably stylized hence rhetorical, normative, and political. To suggest otherwise is to implicitly endorse the false and perverse notion that economics also is purely positivist — to remove the “political” from “political economics.”

I just don’t see that. For example, I don’t see how my own level of understanding of accounting (whatever that level is) is in any way conducive of a “rhetorical, normative and political slant” on my interpretation of economics. As an outside observer, you’d have to point out an observable connection there, because I don’t think there is one at all. What I *have* done in the past is point out what I view to be some dangerous inconsistencies with the overarching MMT framework for accounting. That’s not because MMT is ultra left – its because their analytical distortions actually *prevent* me from becoming seriously interested in their left wing policy thrust. And BTW, those distortions are not at the level of S corporations or comprehensive income – they’re at a much high level. So my take is that your characterization as quoted is at risk of false generalization. I can’t think of why the treatment of an S corporation would cause me particular pain in interpreting accumulated savings from a balance sheet perspective. C or S, the ultimate claimant is always an individual or a household, and that includes some representation of accounting period income covering all balance sheets.

Oh I meant to mention that I just had a great example the other day, a pretty smart and savvy commenter on Bryan Caplan’s blog saying that if C goes down, I must go up. (I pointed out his error and he stopped responding…)

This just to suggest that econ textbook’s emphasis on the S = Y – C = I identity actively prevents many people from thinking properly about this. As always, I’m not saying it’s wrong. I’m saying that other constructs foster better economic understandings, and should be put front and center instead.

But I think that it is quite misguided, and that it’s misleading to suggest that macroeconomics is always “about GDP”. While I recognize that Nick is the macroeconomist, that doesn’t mean his view of macroeconomics is exclusively correct.

My own experience includes formal courses in both conventional macroeconomics and flow of funds analysis. That’s second piece is macro – and it’s not about GDP. And I’ve now spent a fair bit of time looking at “Monetary Economics” by Godley and Lavoie. That’s macroeconomics – and the ENTIRE book is BASED on the FORMAL integration of national income accounting and flow of funds accounting. And I’m not exaggerating in that last statement. Flow of funds analysis includes balance sheet analysis, which includes all of the multi-year scope that Nick suggests is excluded by a focus on national income accounting.

Oversimplifying, Nick has a thing against accounting. I think he’s one of those economists who faces off in an argument about the necessity of accounting foundations by claiming that they’re not sufficient. That’s a standard straw man argument. It’s not about sufficiency; it’s about necessity.

As part of that, I suspect Nick’s feel for flow of funds accounting isn’t a whole lot more than mine for New Keynesian economic models. I don’t think he’d be making the case that he does otherwise. And in doing so, he’s conflating his case against accounting with that other straw man argument – the one he uses here about national income accounting being insufficient. That’s not the point. National income accounting obviously isn’t sufficient. It’s necessary. You need flow of funds accounting as well, which is also necessary.

The crazy thing is that I believe that Nick as an economist actually has fairly strong accounting intuitions as to how to approach the subject. His posts are chock full of self-styled accounting frameworks. He knows macro income accounting. But I don’t think he’s very familiar at all with macro flow of funds accounting and balance sheet analysis. If he were, that would offer him a very rich framework within which to position his arguments about money – because money is part of the flow of funds framework. That’s the irony and the misfortune in my view.

Nick may actually be doing a critique about his own profession in that post. But don’t think that everybody thinks about macroeconomics in the rather constipated way he laments.

The strange thing is that I would prescribe exactly the same advice for Nick as I would for Steve Keen.

Now if only somebody could prescribe how I might be able to understand New Keynesian models.

I should have added that Nick probably understands flow of funds accounting and balance sheets better than I understand New Keynesian models.

But on that connection, I’m quite confident that sound accounting foundations are more important to a coherent explanation of NKE models than vice versa.

“I do see that some accounting presentations are “an impediment” to some economic understandings.”

I see NKE model explanations the same way. I find it hard to figure out why somebody with a high degree of interest in the general subject matter (me) and a sufficient degree of intellectual curiosity should find it so difficult to parse a reasonably intuitive understanding of these models – so far. It is frustrating. (Ring a bell?)

I’ve yet to find a shortcut. But I’m not really looking for one. I’ll just have to make my own.

And so it is with both macro accounting and NKE models.

P.S.

Something that comment about Kuznets overlooks is that Copeland started to develop flow of funds accounting a decade later.

Oh – and try abandoning efforts at macro accounting altogether as seems to be suggested in that comment was a popular recommendation at the time – and see how far you get trying to put together a “non-accounted” economic model. And consider also that a good part of Nick’s lament amounts to the incompleteness of national income accounting – which was exactly the point that Copeland wanted to address. Nick is implicitly if unknowingly seeking flow of funds accounting for at least part of what he’s looking for – and it already exists.

“a pretty smart and savvy commenter on Bryan Caplan’s blog saying that if C goes down, I must go up. (I pointed out his error and he stopped responding…) This just to suggest that econ textbook’s emphasis on the S = Y – C = I identity actively prevents many people from thinking properly about this.”

And that particular example is really just an accounting version of “the Treasury view”. Krugman did a post on exactly this point about 5 years ago – when he was railing against Lucas et al. And Krugman’s response was very good in my view. He didn’t attack the accounting. He attacked the guy who was using the accounting improperly.

“What’s so mind-boggling about this is that it commits one of the most basic fallacies in economics — interpreting an accounting identity as a behavioral relationship. Yes, savings have to equal investment, but that’s not something that mystically takes place, it’s because any discrepancy between desired savings and desired investment causes something to happen that brings the two in line.”

So, you see, he’s not blaming the accounting there. Accounting is just the conceptual framework that is the grounding for the required thought process – but the clarity of the thought process is a second hurdle.

“The System of National Accounts includes a lot more than GDP. For example, the recent versions of SNA (1993 and 2008) include barter transactions, transactions in used assets, financial transactions, and balance sheets. Non-market home production isn’t included, though it could be added as a satellite account. Similarly, the SNA’s standard sectors don’t include generations, but the framework could be adapted to develop a generational accounts as a satellite account. The SNA is really a pretty general framework that isn’t given justice by the typical textbook.”

Why I’m a fan of the IMAs, which explicitly break out the Current, Capital, and Revaluation accounts (unlike the somewhat hodgepodge NIPA presentation, cobbled together and revised over the decades), and which unlike the NIPAs, conform to the SNA structure.

Of note: the difficulty in making the NIPAs conform to SNA guidelines revolves around exactly the crux I’ve been pointing to:

“the NIPAs will continue to adopt the SNA guidelines to the extent that is feasible. However, some differences will persist because BEA has decided to retain several important NIPA aggregates, such as personal income and corporate profits, that do not appear in the SNA”

At least for me, it’s far easier to understand how the economy works, and avoid misconceptions, looking at the IMAs. While they share many of the necessary imputations that the NIPAs are heir to, I find them much more transparent in portraying those imputations (etc.). Better user interface.

I’m quite excited to look at the Eisner book that Tom Hickey recommended.

And yes, I’m constantly going back to Godley and Lavoie, trying to internalize and fully grasp their work. Some parts are Ahas! for me, others require more work…

The distinction between the names are not so important. What is important is the concepts of the flow of funds framework. Morris Copeland invented the flow of funds framework and the national accountants included it the ideas. So what’s now called flow of funds is actually another dimension. But these things are minor. The concepts are the more important things.

I could not agree more. My point is simply that the NIPA structure and labels in particular make it hard to think properly about certain concepts. Not impossible — cf JKH, you, and even me to some extent after years of work. But I sure wish I’d started with the FOFAs and the IMAs.

And — I know both you and JKH will agree — I sure wish undergraduate econ required an excruciating understanding of those accounting concepts and their various labels, as portrayed using various accounting structures.

Yeah exactly. When I started to become interested in economics, I immediately asked myself the following questions well articulated by Morris Copeland who then went on to create the Fed’s flow of funds publication:

When total purchases of our national product increase, where does the money come from to finance them? When purchases of our national product decline, what becomes of the money that is not spent? Is it hoarded, or what? Who has and exercises discretion to increase or decrease expenditures on national product? What part do cash balances, other liquid asset holdings, and debts play in the cyclical expansion and contraction of moneyflow?

I really find it surprising that most economists do not ask these questions at all.